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    28-Aug-2022

Powell's 8 minute speech erases $12 billion from Elon Musk, Jeff Bezos' wealth

 

 

 US Federal Reserve Chair Jerome Powell delivered an eight minute keynote address at the Kansas City Fed’s annual policy forum in Jackson Hole, Wyoming, reported Bloomberg. Powell's speech made it clear that the Fed is likely to keep raising interest rates to stamp out inflation.

The US Federal Reserve has been on an aggressive campaign to raise interest rates and Powell's speech at the Jackson Hole gathering of global monetary policymakers said that its fight against inflation is not over, dashing Wall Street’s hopes that Fed may soon ease up on high interest rates. 

US stocks tumbled, with all three main indices - Dow Jones, S&P and Nasdaq ending with losses of three per cent or more on Friday. In the span of just eight minutes, Powell's speech sparked a market rout that slashed the fortunes of US billionaires' by $78 billion, as per Bloomberg.

World's richest person and Tesla's Chief Elon Musk's fortune saw $5.5 billion decline with his total net worth standing at $254 billion as of August 27, 2022, whereas the second richest Jeff Bezos lost $6.8 billion on the Bloomberg Billionaires Index, erasing around $12 billion from the top two billionaires' fortunes. 

Meanwhile, Bill Gates and Warren Buffett's wealth declined by $2.2 billion and $2.7 billion, respectively, while Sergey Brin’s fortune plunged below $100 billion, as per the Bloomberg data. The Bloomberg Billionaires Index is a daily ranking of the world’s richest people. The figures are updated at the close of every trading day in New York.

Modest signs of slowing in the US economy and easing price pressures had spurred hope in financial markets that the central bank might ease up on its aggressive interest rate hikes, and perhaps even start to reverse course next year. US indices tumbled after Powell said the Fed will likely need to keep interest rates high enough to slow the economy for some time in its effort to tame inflation.

Powell acknowledged that the Fed's continued tightening of credit will cause pain for many households and businesses as its higher rates further slow the economy and potentially lead to job losses. “These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain," he said.

 

 

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